Small business procedures regarding accounting are simple and focused, decreasing possible confusion. Your business might set up procedures for paying bills, receiving money, processing credit cards, entering data in accounting systems and performing reconciliations. Often businesses compile procedures to create an accounting manual, which helps in training new personnel.

Common Cash Procedures

Use receipts. Give clients and customers receipts, especially when they pay hard cash for goods and services. Keep copies of receipts and reconcile cash every day with the receipts. For example, if your cash box started with $100 and ended with $250, then you should have $150 in receipts. Keep your petty cash separate from your cash dealing with customers. Each petty cash expense should have a receipt or a note about it.

Common Expenses Procedures

Pay only authorized expenses. Many times, small businesses receive bills that get paid right away without consideration of who authorized the purchases or if items were received in good order. When signing checks, review all documentation and make sure you're paying for something that is business related and was properly authorized. Consider getting a bank service, usually called "Positive Pay," wherein you provide the bank with a list of checks and amounts, and the bank pays only what is in the list. This is a very reliable way to prevent fraud.

Common Accounting Department Procedures

Reconcile cash once a month with bank statements. The reconciliation is usually signed off by a manager or a business owner. Any corrections and adjustments should be made to cash accounts on the book right away. Reconcile accounts receivable and payable monthly to make sure they agree with the general ledger. Do financial reports the first week of every month for the prior month--after all reconciliations are performed. A common financial report is the "balance sheet," showing cash, receivables and payables. The other standard report is the "income statement" with income and expenses.

About the Author

Sheila Shanker is a certified public accountant based in California. She writes online courses for professionals seeking CPE hours and has also published the book "Guide to Non-profits: From the Trenches." Her articles have been published in national magazines such as the "Journal of Accountancy," "Architecture Business and Economics" and "Veterinary Economics." Shanker holds a Master of Business Administration.